Paramount has filed a lawsuit against Warner Bros Discovery (WBD) in the Delaware Chancery Court, seeking greater transparency around WBD’s proposed $82.7 billion merger with Netflix. The move marks an intensification in Paramount’s challenge to the Netflix-backed deal while promoting its own all-cash offer.
Led by David Ellison, Paramount plans to nominate directors to WBD’s board and prepare for a proxy contest, signalling a more confrontational phase in the takeover battle. Paramount’s offer stands at $30 per share in cash, compared with Netflix’s $27.75-per-share cash-and-stock proposal.
In communications with shareholders, Paramount highlighted that WBD has not demonstrated that the Netflix transaction is financially superior. Paramount also proposed amending WBD’s bylaws to require shareholder approval for any separation of the company’s cable television business-a key component of the Netflix deal.
The company emphasized that its $108.4 billion bid, backed by $40 billion in equity personally guaranteed by Oracle co-founder Larry Ellison and $54 billion in debt, provides greater certainty and fewer regulatory risks compared with the Netflix deal, which involves equity consideration and a planned cable spin-off. Paramount cited the performance of Comcast’s cable spin-off, Versant, as a cautionary precedent.
Shares of Warner Bros Discovery fell 1.5 percent in early trading, while Netflix shares rose 0.8 percent and Paramount gained 0.3 percent. The company’s tender offer is set to expire on January 21, though it may be extended. WBD owns high-profile assets including HBO, CNN, and Warner Bros Studios, with franchises such as Harry Potter and DC Comics.
